Do You Have to Pay Debt Collectors? Your UK Legal Rights

A letter from a debt collector is a claim, not a verdict.

When a company you have never heard of writes to you about a debt, the instinct is either to pay immediately to make it stop, or to throw the letter in a drawer. Both can cost you.

The better move is to check. Who is this company? Do they own the debt or are they collecting for someone else? Is the amount right? Is the debt even yours? Is it still enforceable?

This guide explains how to check whether the firm is authorised, what a Notice of Assignment is, how to ask for the paperwork, what your rights are if you dispute the debt, and what to avoid doing while you are still checking. It covers England and Wales, and general UK consumer credit rules. It is general information, not personal financial advice or regulated debt advice.

Useful next steps before you read on

Before you pay anything, start here:

• If the debt feels very old, read What Is Statute Barred Debt and How Do I Know If Mine Qualifies? before writing anything or paying.
• If contact has felt relentless, read Debt Collector Harassment UK: Know Your Rights & Get Help.
• If you want the wider practical playbook on collector contact, read How to Deal with Debt Collectors in the UK: Your Rights & FCA Rules.
• If you can only afford a small amount, read UK Token Payments: 8 Steps to Manage Debt Repayments.
• If you need to check what your budget can actually spare, use the TRDG Budget Planner.

The aim is to know what you are dealing with before you commit any money.

Step 1: check who is actually contacting you

Start with the company, not the amount.

Read the letter and note:

• the company name and address;
• any FCA firm reference number;
• the original creditor named;
• the account or reference number;
• whether the letter says they now own the debt, or are collecting on behalf of someone else;
• the balance, and whether it matches what you remember.

Then check the company on the FCA's Financial Services Register. Collecting debts due under consumer credit agreements is generally a regulated activity, so a legitimate consumer debt collection firm would normally appear on the register.

If the letter names no original creditor, gives no reference and no company details you can verify, treat it with far more caution.

Step 2: has the debt been sold, or are they collecting as an agent?

There are two common situations, and they are not the same.

The debt has been sold. The original lender has assigned the debt to another company, which now owns it. That company becomes the creditor and is normally the one you deal with.

The collector is acting as an agent. The original lender still owns the debt and has instructed a collection company to chase it. In that case the original creditor is still in charge, and you can often deal with them directly.

The letter should make this clear. If it does not, ask in writing. This matters for who you pay, who you complain to, and who has to answer your questions about the account.

What is a Notice of Assignment?

A Notice of Assignment is the letter telling you that the debt has been transferred to a new owner.

Under the FCA rules, where the rights of a lender under a regulated credit agreement are assigned to a firm, that firm must arrange for notice of the assignment to be given to the customer. That rule does not apply to an agreement secured on land.

Citizens Advice also lists not telling you that a debt has been passed on to a debt collection agency among the behaviours that could be considered harassment.

So if the first you have heard of it is a demand from a company you do not recognise, it is fair and reasonable to write and ask:

• when the debt was assigned;
• who assigned it;
• whether a Notice of Assignment was issued and when;
• for a copy of it.

Ask in writing and keep a copy of the request.

Step 3: ask for the paperwork

For most consumer credit debts, you have a statutory route to ask for the agreement and account information rather than just asking nicely.

Under section 77 of the Consumer Credit Act 1974 for fixed-sum credit, and section 78 for running-account credit such as a credit card, the creditor must, after receiving a request in writing and payment of a £1 fee, give you a copy of the executed agreement and any document referred to in it, together with a statement showing the state of the account.

Section 78 also says that if the creditor fails to comply with that request, they are not entitled, while the default continues, to enforce the agreement.

Two important points, because this is where a lot of online content overstates things:

• This is about enforcement while the request is unanswered. It does not mean the debt is written off, and it does not apply to every type of debt.
• Not all debts are covered by the Consumer Credit Act. Council tax, most utilities, rent and benefit overpayments work differently.

If you are not sure whether your agreement is covered, or what the response means, get help before drawing conclusions.

Step 4: what if you dispute the debt?

Disputing a debt is not the same as refusing to pay. It means you are saying something specific is wrong.

The FCA rules list valid grounds for disputing a debt as including that the individual being pursued is not the true borrower or hirer under the agreement, that the debt does not exist, or that the amount being pursued is incorrect.

Where there is a dispute about identity or the amount, the rules say it is for the firm, and not the customer, to establish that you are the correct person in relation to the debt or that the amount is the correct amount owed under the agreement.

The rules also say a firm must suspend any steps it takes, or its agent takes, in the recovery of a debt where the customer disputes it on valid grounds or what may be valid grounds.

So put the dispute in writing, be specific about what you dispute, and ask them to place the account on hold while they check.

If they reject your repayment offer

Most consumer articles stop after the dispute rules. The FCA rules keep going, and the next part is worth quoting.

The FCA rules on how a firm must handle a repayment offer are stronger than most people realise, and they cover three separate stages.

In plain English, if you make a reasonable offer, the firm has to follow three rules:

1. Consider it properly. Under CONC 7.14.9R, a firm must give due consideration to a reasonable offer of repayment from you or your representative. If it rejects the offer, it must give you a clear written explanation for the rejection.
2. Do not intimidate. CONC 7.14.11R says that if a firm rejects a repayment offer because it is unacceptable, the firm must not engage in any conduct intended to, or likely to, have the effect of intimidating you into increasing the offer.
3. Do not pressure with specific tactics. Under CONC 7.14.12G, conduct that may breach the anti-intimidation rule includes, immediately after rejecting an offer:
   • sending field agents to visit the customer, or communicating that field agents will be sent;
   • substantially increasing the rate of interest, or imposing a substantial charge, or communicating that either will happen.

Making a counter-offer, or taking normal enforcement steps, does not automatically breach the rule. But the FCA also says that where a firm makes a counter-offer, it should give you or your representative a reasonable period of time to consider and respond.

If you make a reasonable offer, it is rejected, and the next contact is an immediate threat of field agents or a sudden interest hike or charge, that is a pattern the FCA specifically calls out. Log it, keep the letters, and treat it as complaint material.

What not to do

Some very natural reactions make things harder.

• Do not agree a payment on the phone under pressure. The FCA rules say a firm must not pressurise a customer to pay a debt in one single or very few repayments, in unreasonably large amounts, within an unreasonably short period of time, or by selling their property, borrowing money or increasing existing borrowing.
• Do not make a "goodwill" payment on a debt you are still checking. A payment can be treated as acknowledging the debt.
• Do not throw away letters. They are your timeline and your evidence.
• Do not ignore court paperwork. A claim form is a different situation from a collection letter, and it has a deadline.
• Do not borrow to clear a collection balance without understanding the full cost.
• Do not assume silence protects you. Ignoring can lead to court action and enforcement.

What to do instead

1. Put your questions in writing and keep a copy.
2. Ask who owns the debt and when it was assigned.
3. Ask for the agreement and a statement of account where the Consumer Credit Act applies.
4. Ask for the account to be held while it is checked.
5. Say clearly what you dispute, if anything.
6. Work out your budget before offering anything.
7. Deal with priority bills first.
8. Keep a dated log of every letter, call and message.
9. If contact is unfair, complain in writing.
10. If you are unsure about statute barred, forbearance, or a regulated debt solution, speak to a qualified debt adviser or an FCA authorised organisation before writing back.

Written contact is slower, but it creates a record. That record is what protects you later.

What about payments you are already making?

If you are already paying, do not stop without thinking it through, especially where the payment protects something important such as your home, energy supply or a vehicle you need.

The FCA rules are clear that a repayment arrangement is unlikely to be sustainable if it means the customer cannot meet their priority debts and essential living expenses, and that priority debts and essential living expenses include payments for mortgage, rent, council tax, food and utility bills.

So the order matters. Priority bills first, then whatever is genuinely left.

If your current arrangement was set when your circumstances were different, the rules also expect firms to treat customers in difficulty with forbearance and due consideration, which can include accepting reduced or token payments for a reasonable period.

What if the contact itself is the problem?

Sometimes the debt is real and the behaviour is still unacceptable.

Citizens Advice lists examples of behaviour that could count as harassment by a creditor, including contacting you several times a day or late at night, using more than one debt collector at a time, pressuring you to sell your home or take out more credit, telling someone else about your debts, or giving the impression that court action has been taken when it has not.

If that is happening, log it and complain to the business in writing. If you are unhappy with the response, the Financial Ombudsman Service may be able to look at it. The Ombudsman says a business has 8 weeks to respond to your complaint.

Your checking checklist

Use this checklist before any money moves:

1. Note the company name, reference and original creditor.
2. Check the firm on the FCA register.
3. Work out whether they own the debt or are collecting for someone else.
4. Ask about the Notice of Assignment if the sale is news to you.
5. Ask for the agreement and statement where the Consumer Credit Act applies.
6. Check the balance against your own records.
7. Check the date of your last payment or written contact.
8. Put any dispute in writing, with specifics.
9. Use the TRDG Budget Planner before making an offer.
10. Keep every letter and log every call.

The earlier you check, the more control you have over what happens next.

FAQs